03 August 2018 ( Lagos ) : This week was an important one for international monetary policy as both the U.S. Federal Reserve (Fed) and UK Bank of England (BoE) concluded their monetary policy meetings. The U.S. Fed left interest rates unchanged while maintaining their bullish economic outlook for the year and pointing towards a rate hike in September and possibly in December. Meanwhile, the UK BoE hiked its base rate by 25bps to 0.75% (highest since March 2009) amid greater confidence in near-term economic growth and sticky inflation above the bank’s 2% threshold (2.4% in past three months). 

Reactions to the BoE decision have been mixed on the back of concerns that Brexit negotiations would weaken the economy and force the apex bank to reverse the course of monetary policy. Analysts note that developments in the U.S. and UK are consistent with their outlook of higher global interest rates which might pressure Nigeria’s external borrowing costs and induce a greater risk of capital flight ahead of the elections. 

Reporting for EasyKobo on Friday ,03 August 2018 in Lagos, Nigeria

Source: Vetiva Capital Management Limited